Gold has been used as a measure of value for thousands of years. Several civilizations based their entire monetary systems on it. For example, the gold standard continues to be used today for most national currencies. Gold is also frequently used as a secondary currency or as an investment vehicle. While most people recognize gold as a valuable metal, there is some uncertainty about the different types of gold and their uses in the modern economy. Is gold an industrial metal or a precious metal? Let’s explore this further to understand which one it is and why it matters.
What is the difference between a precious metal and an industrial metal?
Both precious and industrial metals are elements and chemical compounds that are used in different industries to create a wide variety of products. However, the distinction between the two terms is based on the price and demand for the metals rather than their chemical properties. Most industrial metals are much cheaper than precious metals, which are generally rare and costly. The prices of industrial metals fluctuate based on demand. For example, the price of copper will rise or fall depending on if the demand is higher or lower than expected. Industrial metals are also used in a wide range of products, such as construction, electricity, manufacturing, and transportation. Precious metals, on the other hand, are used primarily for monetary and decorative purposes. The price of precious metals is affected by demand, but mainly by supply and speculation. In the long term, though, the supply of precious metals is limited because they are mined from the earth.
How is gold used industrially?
Gold is used in a wide range of industries, including electronics, aerospace, and chemical production. Gold is a corrosion-resistant metal that does not oxidize in air and does not rust as iron does. It is also a good heat and electricity conductor. Therefore, it is used in electronics because it does not corrode in water or acids. Indeed, its chemical stability makes gold a useful material for many industrial applications.
What are the other industrial uses of gold?
Gold is used in many applications due to its non-reactive nature and high conductivity. Some of the other industries where gold is frequently used are:
- Healthcare: Gold is used in dental and medical applications such as stents or joint replacement.
- Financial: The yellow metal is used in the creation of coins and banknotes as well as in the gold standard.
- Jewelry: Gold is widely used in jewelry because of its beauty, durability, and resistance to corrosion.
- Other: Gold is also used in the agriculture, food, and chemical industries, as well as in electronics.
Which metals are considered “precious”?
Because of the price and relative scarcity of the metals, the following metals are considered “precious” metals:
- Platinum: Platinum is mainly used in jewelry and for industrial applications such as in the electrical or chemical industries.
- Silver: Although widely used in coins for centuries, silver is also used in jewelry and industrial applications.
- Palladium: Palladium is mainly used in the automotive industry. It is also used in the chemical, electrical, and jewelry sectors.
- Gold: Gold is one of the most widely used precious metals in the world. It is used in both industrial and decorative applications.
How is gold used as currency?
For many centuries, gold was the primary currency in most countries, including the US until 1971 when it switched to the gold-exchange standard. Gold has several properties that make it an ideal currency. The supply of gold is relatively limited, so it is hard to create more gold. The metal is also chemically inert and so does not corrode or rust like other metals. Because gold is a dense and heavy metal, it is easy to store and transport. And finally, gold is valuable so it is easy for people to recognize it as a measure of wealth.
Is Gold a Precious Metal or an Industrial Metal?
Gold has been used as a currency for thousands of years. However, it is also used in a variety of industrial applications. Because it is chemically inert and dense, gold is easy to store and transport. It is also highly valued, making it an ideal measure of value. Most major currencies continue to be based on the gold standard. Precious metals are rare and costly, making them valuable for both decorative and industrial purposes. However, industrial metals are less expensive and are used in a wide range of products, such as electronics and construction. The fact that gold is used as both a currency and a commodity makes it unique among precious metals. It gives the metal both decorative and industrial value and makes it a truly precious metal.